The sales organization is a mechanism to realize sales objectives. In organizational process lines of authority are defined. Sales organization is used to attain the qualitative and quantitative objectives of personal seeking. These objectives are related to sales volume, profitability, and market share.
The sales organization is concerned with structuring the personnel selling activities.
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Factors Affecting Structure of Sales Organization
The following are the factors affecting structure of sales organization:
1. Nature of the Product
The nature of the product affects the structure of the sales organization.
In the case of consumption goods likes soaps, oils, cosmetics, etc., the size of the sales organization may be bigger to handle a large number of customers.
Related: 19 Characteristics and Objectives of Sales Organization (With Examples).
2. Scale of Production
The volume of production and the quantities involved in each sale will also affect the structure of the sales organization.
If the scale of production is big and the number of products and the quantity involved is too many, the size of the sales organization will be large and complex.
3. Area of Operation
If the marketing area of the product is national or International, the size of the sales structure will be big.
Related: 10 Importance of Salesmanship to Consumers (Explained with Examples).
4. Business Size
If the size of the business is small, a simple sales structure may be sufficient.
5. Distribution Channels
If the company distributes the goods directly through its shops, the sales structure will be large and complex.
If the company sells its products to wholesalers, the size of the sales organization will be competitively small.
6. Financial Resources
A concern with limited financial resources can distribute its products through the agency system.
This will require a small sales organization. 12 Need and Importance of Sales Organization (With Examples).
7. Ability of Managers
Competent sales managers may initiate new sales plans and policies.
They can adopt new selling techniques and strategies.
This will require a Complex and larger sales organization.
Related: Top 21 Qualities and Characteristics of Creative Person.
8. Management Policy
Where the management centralizes the various functions like advertising, publicity, credit, repairs, and maintenance and establishes regional or diversion offices, the sales organization will be large and complex.
9. Sales Policy
If the company sells the entire products to the sole selling agent, the organization structure will be small.
10. Price Structure
In the case of low priced goods, the demand and the number of customers may be big.
Thus, it will require a large sales organization.
Related: 14 Essential Features and the Importance of Product (Explained).
11. Competition
To meet the challenges of increased and acute competition, it is necessary to expand the size of the sales organization.
12. Types of Customers
The types of customers such as industrial or commercial, wholesale or retail, domestic or foreign, rural or urban, man or woman, old and young, etc. must be considered while selling up the structure of sales organization. Top 13 Politicals Factors Affecting Business Activities.
13. Customs and Traditions
Certain marketing customs and traditions relating to credit, maintenance, and repair, channels of distribution, etc. are also considered while setting up the sales organization.
Thus, now you know the factors affecting structure of sales organization.
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